In re Strobel

• Decision Date: 04 August 1908
• Citation: 163 F. 787
• Parties: In re STROBEL.
• Court: U.S. District Court — Eastern District of New York

163 F. 787

In re STROBEL.

United States District Court, E.D. New York.

August 4, 1908

Benjamin F. Edsall, for trustee.

Albert C. Aubery, for bankrupt.

Dittenhoefer Gerber & James (A. J. Dittenhoefer and Frank Trenholm, of counsel), for Bachrach.

CHATFIELD District Judge.

The point at issue is simple in statement, but exceedingly important in application. Act July 1, 1898, c. 541, Sec. 57, 30 Stat. 560 (U.S. Comp. St. 1901, p. 3443), as amended specifies many details as to 'proof and allowance of claims,' and subdivision 'n' is as follows:

'Claims shall not be proved against a bankrupt estate subsequent to one year after the adjudication; or if they are liquidated by litigation and the final judgment therein is rendered within thirty days before or after the expiration of such time, then within sixty days after the rendition of such judgment: Provided, that the right of infants and insane persons without guardians, without notice of the proceedings, may continue six months longer.'

A 'proof of claim' is defined by subdivision 'a' of section 57 to be 'a statement under oath in writing, signed by a creditor,' with various details as to the kind, nature, and amount of the debt. It will thus be seen that a 'proof of claim' is defined by the act to be a paper, and to be an affirmative personal paper writing made by the creditor, as distinguished from any admission of the bankrupt, or secondary evidence from other documents. The language of subdivision 'n' could not well be stronger, and the statute certainly seems to imply that no claim shall be proved, by the filing of a proof of claim defined in subdivision 'a,' after 12 months have elapsed since adjudication.

In the present case the bankrupt was adjudicated upon October 21, 1905. No appeal from the adjudication was taken, no claims now under consideration were liquidated by litigation, wherein a final judgment was rendered within 30 days after the expiration of 12 months since adjudication, nor is any claim affected by the rights of infants or their guardians. The question is directly raised through the debts of the bankrupt to one Bachrach, whose claims are as follows: First. $7,454.58, with interest from August 25, 1904, which amount was embodied in a chattel mortgage made null and void by filing in the county of New York, instead of in the county of Kings, where the bankrupt resided. Second. $3,500, merchandise debt alleged to have been due Bachrach at the date of the petition in bankruptcy. Third. $3,015.76, which amount Bachrach is now under bond to pay, with interest, into the estate under order of this court.

This last amount can in no wise be considered a claim against the estate, under the determination of this court and of the United States Circuit Court of Appeals for this circuit in Re Leonard Strobel, Indv., etc., Bankrupt (decided Feb. 28, 1908, and March 9, 1908) 160 F. 916. By these decisions it has been conclusively determined that the amount in question was due for property erroneously taken by Bachrach from the receiver in bankruptcy, the value of which he was ordered to restore. The other two items-- that is, the amount represented by the void chattel mortgage, and the claim for general merchandise-- may be treated alike, so far as this application is concerned.

The bankrupt in his schedules has recited as debts owing by him the $7,454.58, with interest, involved in the chattel mortgage transaction, and the $3,500 indebtedness for merchandise. The creditor Bachrach has claimed by a verified petition, in writing, in this proceeding both the amount due under the chattel mortgage and the claim for the $3,500, the latter claim having been made by this creditor in the guise of a petition to have his alleged right to the merchandise itself determined, and it was upon this application that the court decided his claim to be merely an indebtedness, unsecured in any way. This latter question has been in litigation, and has ultimately been determined in favor of the estate within a very recent time, and not until over two years had elapsed subsequent to adjudication. Upon this condition of affairs, the trustee in bankruptcy has objected to the filing with the referee of a claim under section 57n of the statute, and the referee has returned the same, upon the 15th day of July, 1908, whereupon the creditor Bachrach has applied to this court for an order directing that the referee receive the proof of claim, and allow the same to the amount which may be proven.

It appears from the record that no dividend has been declared, and that the trustee has not as yet received from the receiver the fund which may be in the receiver's hands, and as to which an accounting has been delayed by the applications pending before the court. The trustee cites the following cases, which must be considered: In re Stein (D.C.) 94 F. 124; Bray v. Cobb (D.C.) 100 F. 270; In re Shaffer (D.C.) 104 F. 982; In re Rhodes (D.C.) 105 F. 231. Of these cases the last one is the only one directly setting forth the doctrine urged. The creditor Bachrach relies upon the case of In re Fagan (D.C.) 140 F. 758, 15 Am. Bankr. Rep. 520.

There would seem to be little room for doubt as to the intent of Congress in making use of the...